Post # 102 -- Personal Finances for Self-Reliance Lesson # 7
Understanding Debt
Dear Family
and Friends
Today our
topic of conversation is Understanding Debt. Can you ever really understand
debt? I know that interest never sleeps, it keeps incurring even as we sleep,
which makes your debt continue to grow. But lets not get ahead of ourselves, we
need to review our last group commitments:
Last week’s
commitments: Ⓐ
Practice and share last week’s My Foundation principle – Use time wisely. Ⓑ Begin building my one-month emergency
fund. Ⓒ
Discuss emergency fund and insurance plans in family council. Ⓓ Contact and support my action
partner.
Our question: What challenges did you have with keeping your
commitments this week?
Ⓐ
Practice and share the My Foundation principle – I have been more aware of how
I am using my time. I still struggle some days, but I do think I am doing
better. I am sharing with all of you now😊
Ⓑ
Plan and Manage My Finances – I keep working this and u think I am getting the hang
of it,
Ⓒ
Hold a Family Council --- this one is always a struggle for me because I am
pretty much by myself. My granddaughter just turned 18 in these past few months
she is becoming more independent. We do talk with each other about her finances
and mine occasionally though. I did talk with the group about developing my
emergency fund and what type of insurance I might need.
Ⓓ
Contact and Support My Action Partner – I did manage a late in the week text,
but got no reply.
It is amazing
what you can learn when you are jotting everything down for a week or so you
know? I discovered that I really need to learn or relearn to use my time more
wisely. I am still working on trying to build up my emergency fund. No family
council in place yet though I do keep hinting towards establishing it. When
it is not your home you hardly have the right to impose your ideas onto others
-- even if they are your family😊
I have
been discussing the principles of the class a bit with my granddaughter though
as she will soon be venturing out on her own and I would like her to be in a
better place financially than I was when I started our – in fact probably even
now☹ on to our questions for this section:
○ What experiences did you have practicing or sharing the My Foundation
principle?
○ What have you done differently to save money for your one- month
emergency fund? I save
all of my five-dollar bills and I have also decided to put in fifty dollars a
pay check.
○ How was your discussion about insurance plans and building your
emergency fund in your family council? I
talked with my granddaughter about this briefly.
This is a
recap of what we have been learning in the past few weeks:
Week 1---Self-reliance is a principle of salvation ● ● ● Track expenses ● ● ●
Counsel with the Lord
Week 2--- Exercise faith in Jesus Christ ● ● ● Track expenses ● ● ●
Counsel about income and expenses
Week 3--- Repent and be obedient ● ● ● Track expenses ● ● ● Counsel
about tithes and offerings
Week 4---- Live a balanced life ● ● ● Build a budget ● ● ● Counsel
about budgeting
Week 5---Solve problems ● ● ● Choose a budgeting system ● ● ●
Counsel about budgeting
Week 6 ---Use time wisely ● ● ● Put money toward financial priority
● ● ● Counsel about emergency fund, insurance
The following
are the lessons to come:
Week 7 Show integrity ● ● ● Put money toward financial priority ● ●
● Counsel about debt
Week 8---Work: take responsibility and persevere ● ● ● Put money
toward financial priority ● ● ● Counsel about debt
Week 9--- Communicate: petition and listen ● ● ● Put money toward
financial priority ● ● ● Counsel about crisis management
Week 10---Seek learning: resolve where you are going and how to get
there ● ● ● Put money toward financial priority ● ● ●Counsel about saving, home
ownership, education ● ● ● ● ● ● ________
Week 11 Become one, serve together ● ● ● Put money toward financial
priority ● ● ● Counsel about retirement planning ● ● ● ● ● ● ________
Now I guess
we can begin with this week’s lesson:
My Foundation
Principle: Show Integrity
Financial
Principles and Skills: 1. Understand debt. 2. Understand your debt realities.
3. Desire to get out of debt. 4. Overcome the ‘natural man.’
We were asked
to ponder this question: Why does the Lord love those with “integrity of
heart”? then we watched: “What Shall a Man Give in Exchange for His Soul?”
available at srs.lds.org/videos. I found the video here: https://www.lds.org/media-library/video/2014-06-1200-what-shall-a-man-give-in-exchange-for-his-soul?lang=eng&_r=1
This is the
transcript for the movie we watched called: WHAT SHALL A MAN GIVE IN
EXCHANGE FOR HIS SOUL?
ELDER ROBERT C. GAY: The Savior once asked His disciples the
following question: “What shall a man give in exchange for his soul?” This is a
question that my father taught me to carefully consider years ago. As I was
growing up, my parents assigned me chores around the house and paid me an
allowance for that work. I often used that money, a little over 50 cents a
week, to go to the movies. Back then a movie ticket cost 25 cents for an
11-year-old. This left me with 25 cents to spend on candy bars, which cost 5
cents apiece. A movie with five candy bars! It couldn’t get much better than
that.
All was well until I turned 12. Standing in line one afternoon, I
realized that the ticket price for a 12-year-old was 35 cents, and that meant
two less candy bars. Not quite prepared to make that sacrifice, I reasoned to
myself, “You look the same as you did a week ago.” I then stepped up and asked
for the 25-cent ticket. The cashier did not blink, and I bought my regular five
candy bars instead of three. Elated by my accomplishment, I later rushed home
to tell my dad about my big coup. As I poured out the details, he said nothing.
When I finished, he simply looked at me and said, “Son, would you sell your
soul for a nickel?” His words pierced my 12-year-old heart. It is a lesson I
have never forgotten. (“What Shall a Man Give in Exchange for His Soul?” Ensign
or Liahona, Nov. 2012, 34)
We talked
together about these questions: What does it mean to have integrity? What are some small ways
people give away their souls to get things in this life?
We then read:
Articles of Faith 1:13 and Job 27:5
“We believe in being
honest.” ARTICLES OF FAITH 1:13
We believe
in being honest, true, chaste, benevolent, virtuous, and in doing good to all
men; indeed, we may say that we follow the admonition of Paul – We believe all
things; we hope all things; we have endured many things; and hope to be able to
endure all things. If there is anything virtuous, lovely, or of good report or praiseworthy,
we seek after these things.
“Till I die I will not remove mine integrity
from me.” JOB 27:5
God forbid that I should
justify you: till I die I will not remove mine integrity from me.
This next
part we took a little survey about ourselves. Here it is, so that you can take
it as well:
PUT A NUMBER IN FRONT OF EACH ITEM TO SHOW HOW OFTEN YOU ACT THIS
WAY. 1 = never, 2 = sometimes, 3 = often, 4 = always
1. I keep all of my promises, commitments, and covenants.
2. I am completely truthful in things I say and in the records I
keep.
3. I do not exaggerate to make things appear better than they
are.
4. I return everything I borrow and do not take things that do not
belong to me.
5. I am completely faithful to my spouse in my words and actions.
6. I never cheat, even when I know I won’t be caught.
7. When I find something that isn’t mine, I return it to the owner.
8. I always pay back money I borrow.
Then we read:
Read Mosiah 4:28 and the quote by Elder Joseph B. Wirthlin. We talked
about these questions: Why is repaying a debt or business or student loan (like a PEF
loan) a matter of personal integrity?
“And I
would that ye should remember, that whosoever among you borroweth of his
neighbor should return the thing that he borroweth, according as he doth agree,
or else thou shalt commit sin; and perhaps thou shalt cause thy neighbor to commit
sin also.” MOSIAH 4:28
“Integrity means always doing what is right and good, regardless of
the immediate consequences. It means
being righteous from the very depth of
our soul, not only in our actions but,
more importantly, in our thoughts and in
our hearts. . . . A little lying, a little cheating, or taking a little unfair
advantage are not acceptable to the Lord. . . . The consummate reward
of integrity is the constant companionship of the Holy Ghost, . . . [who will]
guide us in all we do.” JOSEPH B. WIRTHLIN, “Personal Integrity,” Ensign, May 1990, 30, 32, 33
These are the
things that we committed to do during the upcoming week:
□ Improve one of the eight areas you rated above.
□ Share what you’ve learned today about integrity with your family
or friends.
This week we
are on level three of our financial house – ELIMINATE DEBT
FINANCIAL STEWARDSHIP
SUCCESS MAP
LEVEL FIVE: CONTINUE
TO GIVE AND TO BLESS OTHERS Teach your children • Lift the poor • Press forward
in Christ
LEVEL FOUR: SAVE
AND INVEST FOR THE FUTURE Savings, home ownership, education, retirement
LEVEL THREE: ELIMINATE
DEBT
LEVEL TWO: PROTECT
YOUR FAMILY FROM HARDSHIP 1-month emergency fund, 3- to 6-months’ savings,
insurance
LEVEL ONE: PAY
TITHES AND OFFERINGS
FOUNDATION: FAITH
IN JESUS CHRIST • UNITY WITH SPOUSE COMMITMENT TO SELF-RELIANCE
Now we begin
to get into the ‘meat’ of our discussion:
1. UNDERSTAND DEBT
This comes
directly from our lesson manual: “Debt is borrowing money that is not yours. It typically comes with
a cost, known as interest. Interest is a percentage of the amount owed. You end
up paying more for what you borrowed, sometimes a lot more. Debts come with
expected payments, and an overall expectation to repay all that you borrowed
plus interest.
We had quite
a conversation about this next question:
Why do people borrow money?
Here is a quote directly from the
manual for you to read: “Prophets have
always counseled us to avoid debt. President Heber J. Grant taught, “If
there is any one thing that will bring peace and contentment into the human
heart, and into the family, it is to live within our means. And if there is any
one thing that is grinding and discouraging and disheartening, it is to have
debts and obligations that one cannot meet” (Gospel Standards: Sermons and
Writings of Heber J. Grant, comp. G. Homer Durham [1941], 111).
Throughout the next
two chapters you will learn to follow the prophets’ counsel to get out of debt
We were asked to take a few minutes to ponder
and to consider financial decisions you have made that went poorly. Then answer
these questions:
What were the consequences?
How long did you feel the effects?
How did it affect you, your marriage or family, and your ability to
serve others?
Avoid Debt
This quote is directly from
our manual: “Prophets have counseled that there are very few justifiable
reasons to go into debt and that when you do incur debt you should pay it off
as quickly as possible. President Gordon B. Hinckley taught that “reasonable
debt for the purchase of an affordable home and perhaps for a few other
necessary things is acceptable. But from where I sit, I see in a very vivid way
the terrible tragedies of many who have unwisely borrowed for things they
really do not need” (“I Believe,” Ensign, Aug. 1992, 6).
Depending on the circumstances, debt may be acceptable for the
following expenses:
○ A modest, affordable home
○ Reasonable educational expenses that will lead to better work
○ Modest, basic transportation (only if necessary)”
“You should likely avoid going into debt for items other than
these. Instead, save up for expenses. “
We were asked to ponder and take a few
minutes to think about the following question and write your thoughts: How will it feel to
be debt free?
I thought
this idea was a good way to remind yourself or to teach your children about
debt and other finances. For your children you could have them add a link for
every dollar or five dollars they have saved toward a purchase of something
they are saving their money to buy😊
SHRINKING OUR PAPER CHAIN
I went to an expensive graduate school. I got a good job afterward
but was more than a hundred thousand dollars in debt. I was looking at a LONG
time before I had that debt paid off. One Saturday, my wife and I made a paper
chain with each chain link representing $1,000. There were 100 links! We keep
our chain in the family room and tear off one link every time we pay down
another $1,000. Even though it will take several years to be debt free, we
enjoy watching our chain shrink, and it’s a great way to teach our kids about
debt, and to involve the whole family in our quest.
This next
section is about learning important principles for getting out of debt as
quickly as possible. This comes right out of our manual.
Get out of Debt
You can get out of debt!
Aggressively paying down debt will require significant sacrifice, but you can
do it. Below are five important principles for getting out of debt.
We will cover the first three in this chapter.
1. Understand your debt realities
2. Desire to get out of debt
3. Overcome natural-man tendencies that lead to debt
4. Stop incurring debt
5. Pay off your debts
Here’s a
question for you to answer before you move on:
What thoughts or impressions do you have from reading these five
principles?
2. UNDERSTAND YOUR
DEBT REALITIES -- (this is the first of the five principles of getting out of debt)
Think about and answer the
following questions about your debt: How much debt do you have?
What are the interest rates?
What are the payments?
How long will it take to pay off your debt, and how much interest
will it cost you?
It is important to know
these things as you work to get out of debt. To do so, you will create a debt
inventory. Below is a sample debt inventory table.
DESCRIPTION
|
BALANCE
|
INTEREST RATE
|
MONTHLY PAYMENT
|
Credit card #1
|
4,000
|
17%
|
97
|
Credit card #2
|
6,500
|
19%
|
168
|
Car
|
5,000
|
3.00%
|
145
|
Student loan
|
18,000
|
5.50%
|
300
|
Mortgage
|
170,000
|
4.50%
|
1,050
|
In your family council this week, you will create a similar table.
Be sure to fill in all of the information for each debt.
3. DESIRE TO GET OUT
OF DEBT ---(this is the second of the five principles for getting
out of debt)
We then read the following quote from
the manual and then one with teachings from Elder Dallin H. Oaks and elder Neal
A. Maxwell: In order to do anything difficult, including getting out of
debt, your desire must be stronger than the obstacles. Elder Dallin H. Oaks
taught, “When we have a vision of what we can become, our desire and our power
to act increase enormously” (“Desire,” Ensign or Liahona, May 2011, 44). To
find success, focus on your goal to get out of debt and visualize what life
will be like when you are free from the burden of debt. Elder Neal A. Maxwell
taught, “What we insistently desire, over time, is what we will eventually
become” (“According to the Desire of [Our] Hearts,” Ensign, Nov. 1996, 21).
The things that I learn from this section are
that:
1. Our desires
must be stronger than the obstacles that we are facing.
2. Our power
to act increases enormously when we can see in our minds what we truly have the
potential to become.
3. If we will
focus on our goal to become debt free and if we will keep a picture in our
minds of what our life will be like when we are out of debt, we will find our
success.
4. “What we
insistently desire, over time, is what we will eventually become”
It’s question
time again. Answer these questions before you move on:
Why do you desire to be debt free?
What will you be able to do that you aren’t able to do now?
4. OVERCOME THE
“NATURAL MAN”—(this is the third of the five principles
for getting out of debt)
This story is found in the Book of
Mormon where we can learn about the natural man ( or woman) : In the Book of
Mormon, King Benjamin taught, “For the natural man is an enemy to God, and has been from the fall of
Adam, and will be, forever and ever, unless he yields to the enticings of the
Holy Spirit, and putteth off the natural man and becometh a saint through the
atonement of Christ the Lord, and becometh as a child, submissive, meek,
humble, patient, full of love“ Mosiah 3:19.
To put off the natural man, we must remember the principles we
learned from chapter 4 about maintaining a long-term perspective. Like the
children in the marshmallow experiment, we need to learn to delay short-term
pleasures in order to reach long-term goals.
“Natural man” tendencies include:
○ Impulsive and emotional spending.
○ Ignorance or carelessness about our financial reality.
○ Coveting and comparing
ourselves with others.
Yielding to the
natural man will likely lead us to debt and financial stress. On the other
hand, as we
seek to follow the “enticings of the Holy Spirit,” we will be enabled by the
power of the Atonement to become strong in the face of adversity.
So, what does
it mean to put off the natural man?
It’s time for you to ponder and take a few
minutes to think about the following questions and be sure to write your
answers down:
When was the last time you made an expensive, impulsive purchase?
What was it?
How could you have used that money more effectively for something
else?
Now that you
have answered those questions we can move on and take a closer look at our
financials. This comes
directly from the manual:
Let’s look more
closely at some of these tendencies of the natural man in the context of
self-reliance.
Impulsive and Emotional Spending
“We have all likely made an
impulsive or emotional purchase.
Sometimes we spend money when we feel discouraged or angry. Sometimes we
spend money because we feel that we are entitled to reward ourselves. Sometimes
a sale or promotion tempts us into believing we need something when we really
don’t. There are many reasons why we spend money on things we don’t really need
at the expense of paying for the things that matter most. The following
activity will help us understand why we make impulsive purchases.”
This was one
of the activities we did in our class. I thought I would share it with you for
you to do as well😊
Step 1: Take a few minutes to evaluate your emotional spending
habits by responding to the questions below.
Step 2: After you have filled out the questionnaire, pair up with
your spouse (if present) or action partner and discuss the following:
○ What are some patterns you notice related to emotional or
impulsive spending?
○ What can you do to protect you from yourself?
HOW DO I FEEL WHEN I SPEND IMPULSIVELY? (Check all that apply.) □
Alone □ Bored □ Excited □ Generous □ Happy
□ Hungry □Mad □Sad □Stressed
□Tired □Underappreciated
WHAT DO I SPEND ON WHEN I SPEND IMPULSIVELY? (Check all that
apply.) □ Clothing □ Dining at restaurants □ Electronic devices or accessories □
Entertainment □Gifts □Home furnishings
or decorations □Snacks or beverages □Travel
WHO AM I WITH WHEN I SPEND IMPULSIVELY? □ Children □ Coworkers □
Friends □Nobody; I am alone □Spouse
Here are some
really good questions for you to ponder and answer:
How can we overcome tendencies to make impulsive purchases?
What have you done in the past to overcome such impulses?
Ignorance or Carelessness about Our Financial Situation
Here is a story for you to read, it’s
about Nephi from the Book of Mormon but can be applied to each one of you:
In the Book of Mormon, Nephi chastises Laman and Lemuel for being
“past feeling” and unable to feel the Spirit work within them (see 1 Nephi
17:45). Our choices can often harden our hearts, making it difficult to feel
the promptings of the Spirit when we must change. Sometimes being “past
feeling” may cause us to choose to ignore the reality of our situation. We may
want to avoid tracking expenses or looking at our bank accounts. If we use
credit cards or other consumer credit, this carelessness can quickly lead us
into debt.
1Nephi
17:45
Ye are
swift to do iniquity but slow to remember the Lord your God, Ye have seen an
angel, and he spake unto you; yea, ye have heard his voice from time to time;
and he hath spoken unto you in a still small voice, but ye were past feeling,
that ye could not feel his words; wherefore, he has spoken unto you like unto
the voice of thunder, which did cause the earth to shake as if it were to divide
asunder.
Sometimes one or both partners in a marriage will spend carelessly,
assuming that the other partner is responsible for the family’s financial
situation. Remember, both spouses are equally responsible for their family’s
finances, and ignoring or transferring our responsibility will only push us
further into financial trouble.
Here are your
next set of questions for you to answer. Make sure you write them down so you
can refer or compare them at a later date to see your progress: Why are some
inclined to ignore the reality of their situation?
How can you overcome being “past feeling” about your financial
situation, if you need to?
How can we overcome the tendency to compare ourselves with
others?
Coveting and
Comparing Ourselves with Others
This thought comes from the manual,
but it is so true for all of us as well I think: It is natural for
people to compare themselves with others, and we are bombarded with messages
and advertisements encouraging us to purchase things we do not need. Sometimes
we feel entitled to have things that we can’t afford or don’t really need.
Giving in to coveting can quickly lead us to make unwise purchases.
Here is our
question for this part: How can we overcome the tendency to compare ourselves with others?
DISCUSS FINANCIAL
PRIORITIES IN YOUR FAMILY COUNCIL
This comes from the lesson manual for
you to use in you’re family council: During your family council
this week, you will discuss ways in which you can overcome and protect
yourselves from “natural man” tendencies. Together, discuss your current debts
and create a “debt inventory” (see the blank debt inventory sheet below), You
may consider using the “Sample Family Council Discussion” outline below to
guide your council. As you identify your debts together, and as you develop
ways to overcome “natural man” tendencies, you will receive the Lord’s help to
eliminate your debts.
SAMPLE FAMILY
COUNCIL DISCUSSION
Be sure to begin and end with a prayer to invite the Spirit.
Part 1: Review
○ What are some ways that you manifest natural man tendencies?
○ When was your last big,
impulsive purchase? What could you have done with that money instead?
○ When you become debt free, what will you be able to do that you
cannot do now?
Part 2: Plan
○ Put together a debt inventory using the table below
○ Ask yourself:
• What can you do differently to eliminate your debts?
• What practices can you put in place to overcome and prevent
natural man tendencies?
• How can you involve the Lord to help you put off the natural man?
We were asked
to ponder and to Individually think about what we have learned today and consider
what the Lord would have us do. Read the scripture or quote below and write
responses to the questions. I have included this for you to do as well😊
“And
again, verily I say unto you, concerning your debts—behold it is my will that
ye shall pay all your debts” (D&C 104:78).
What are the most meaningful things I learned today?
What will I do as a result of what I learned today?
These are our
commitments for this upcoming week. Wont you each commit to do them with me?
MY
COMMITMENTS
Ⓐ I
will practice and share this week’s My Foundation principle. Show Integrity
Financial
Principles and Skills: 1. Understand debt. 2. Understand your debt realities.
3. Desire to get out of debt. 4. Overcome the ‘natural man.’
Ⓑ I
will inventory my debt using the example above.
Ⓒ I
will discuss my debt inventory and ways to overcome and prevent “natural man”
tendencies with my family or an accountability partner.
Ⓓ I
will contact and support my action partner. This would be your spouse or other
financial partner.
Well folks,
that’s all for this week’s lesson. Lesson 8 will be next week; I hope you have
learned as much as I have from this lesson. I also hope you will accept the
challenge to keep the commitments for this upcoming week to work on getting out
of debt😊 I hope what I have shared with you today has enlightened and uplifted
you in some way and maybe helped you feel some of the hope that Christ has
offered to each of us.
My Dear Family and Friends even though I may be a slow
learner and a little bit slow to get my thoughts out there to share with each
one of you. I do hope that you will continue to come back to my blog and
continue to study along with me throughout this year – the New Testament – and all
the stories about Christ ad His ministry, about al of His disciples, and His
chosen Apostles. It has been interesting so far to learn about the writers of
the New Testament and especially to learn more about our Savior Jesus Christ. Until
my next post, keep praying, studying your scriptures with me, and please make it
a great week! 😊
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